Definition: Statistics is scientific methods for collecting, organizing,

summarizing, presenting & analyzing sample data as well as drawing a valid

conclusion about population.
Characteristics:
1. Statistics
alone.
2. Statistics
3. Statistics
4. Statistics
5. Statistics

deal with aggregate of individuals rather than with individual

should be expressed as numerical figure.
should be collected by reasonable standard of accuracy.
should be obtained for pre-determined purpose.
collected should allow comparison with other data.

Types:
1. Descriptive Statistics: Methods of organizing,
presenting data in an informative way.

summarizing, and

EXAMPLE: A Gallup poll found that 49% of the people in a survey knew the
name of the first book of the Bible. The statistic 49 describes the number
out of every 100 persons who knew the answer.
2. Inferential Statistics: A decision, estimate, prediction, or generalization
about a population, based on a sample.
EXAMPLE: TV networks constantly monitor the popularity of their
programs by hiring Nielsen and other organizations to sample the
preferences of TV viewers.
Scope of statistics in Business and management:
1. Marketing: Statistical analyses are frequently used in providing
information for marketing decisions. A skilful analysis of data on
population, purchasing power, habits of people, competition,
transportation cost etc, should precede any attempt to establish a new
market.
2. Production: In the field of production, statistical data and statistical
methods play a very important role. The decision about what to
produce, how much to produce, when to produce, for whom to produce
is based largely on facts analysed statistically.
3. Finance: The financial Managers in discharging their finance
function efficiently depend heavily on statistical analysis of facts and

figures. Financial forecasts, breakeven analysis and

decisions under uncertainty are but part of their activities.

investment

4. Banking: Banking institutions have found it increasingly necessary

to establish departments within their organization for the purpose of
gathering and analyzing information.
5. Investment: Statistics greatly assists investor in making clear and
valued judgment in his investment decision in selections securities
which are safe and which have the best prospects of yielding a good
income.
6. Purchase: The purchase department in discharging its functions
makes use of statistical data to frame suitable purchase policies such
as from where to buy, how much to buy, at what time to buy and at
what price to buy.
7. Accounting: Statistical methods are also employed in accounting
.In particular, the auditing functions makes frequent application of
statistical sampling and estimation procedures, and the cost account
uses regression analysis.
8. Control: The management control process combines statistical and
accounting methods in making the overall budget for the coming yearincluding sales, material, labor and other costs and net profits and
capital requirements.
9. Credit: The credit department performs statistical analysis to
determine how much credit to extend to various customers.
10. Personnel: The personnel department frames personnel policies
based on facts. It makes statistical studies of wage rates, incentive
plans, cost of living, labor turnover rates, employment trends, accident
rates, employee grievances, performance appraisal, training
programmes etc.

Limitations of statistics:
1. Statistics deals only with quantitative characteristics
2. Statistical results are true on average.

3. Statistics can be misused.